Over the past 6 months, several reports of who these gold farmers are and what they do has emerged and the overall picture is quite consistent. Some of these reports rely on extensive conversations with actual gold farmers in the game. Others are based on documentation of actual gold farms in Asia and interviews with managers and workers.

New York Times - Ogre to Slay? Outsource it to China
Game Guides Online - Secrets of Massively Multiplayer Farming
The Observer - They play games for 10 hours - and earn £2.80 in a 'virtual sweatshop'
1UP - Wage Slaves
FFXI Forum - Confessions of a Gil-Seller

The overall picture seems to be that many gold farms are based in China (although there are a few in other countries). Most of these workers are students in their late teens or early 20s. They work for a boss who owns the machines and software and need to accumulate virtual currency on a daily quota system. Sometimes, multiple workers share the same account and cannibalistic behavior emerges where one worker will sell the character's equipment to make the quota, thereby putting their "partner" at a disadvantage. While some use the term "sweatshop" to describe these gold farming operations, most of these establishments would probably be considered normal or well-furnished in local standards. Gold farming pays a livable wage. As the following manager implies, most other employment options for people who do gold farming involves hard labor.